EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0841237
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Cantarella Bros Pty Ltd applied for a TCO in respect of certain packaging tins on 26 November 2008.
Instrument
TCO No 0841237 was made on 27 February 2009. It declares that those certain packaging tins are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0841237 is taken to have come into force on 26 November 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0841237 was enacted in 2009 under the Customs Act 1901 to facilitate the application of tariff concessions on certain goods, in this case, packaging tins, by granting a lower rate of customs duty. The legislation was introduced to address the gap in providing tariff concessions for goods where no substitutable goods are produced in Australia in the ordinary course of business. This instrument was made by the Chief Executive Officer of Customs, following an application by Cantarella Bros Pty Ltd for a Tariff Concession Order (TCO). The TCO was made effective from 26 November 2008, the date the application was lodged, and it provides a duty-free rate for the specified packaging tins, down from the general rate of 5%. The policy objective behind this concession is to encourage the importation of goods that are not domestically produced, thereby potentially benefiting importers who can apply for duty refunds on goods imported since the TCO came into force.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking tariff concessions for goods imported into Australia. This includes businesses, importers, and manufacturers who wish to import goods without incurring the standard customs duty. The Act is administered at the Commonwealth level, ensuring a uniform approach across all states and territories. The Act provides for Tariff Concession Orders (TCOs) which can be applied for by any individual or entity, as long as the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. A TCO may be granted if the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The Act also mandates the publication of a notice in the Gazette to allow for public submissions on TCO applications, although no submissions were received in the case of TCO No 0841237. The TCO takes effect from the date the application was lodged, providing immediate benefits to importers by allowing them to apply for refunds of duty paid on goods imported since that date. The application of the TCO does not disadvantage any person or impose any liabilities on anyone in respect of actions taken prior to the registration of the TCO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0841237, under the Customs Act 1901 (the Act), pertain to the creation and operation of Tariff Concession Orders (TCOs). Section 269F of the Act enables a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods (269F). If the CEO is satisfied that the application is valid, the core criteria outlined in section 269C must be met (269C). This includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (269C). If these criteria are met, the CEO must issue a written order, declaring the goods to which the TCO applies (269P(3)).
The obligations imposed by this Act on the parties involved are primarily administrative. The CEO must review applications for TCOs to ensure they meet the statutory criteria (269F). Once an application is deemed valid, the CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions against the TCO if they believe it should not proceed (269K(1)). Additionally, the CEO is required to make a written TCO if the application meets the core criteria (269P(3)). For the applicant, the obligation is to provide sufficient information and evidence to substantiate the application and meet the criteria for a TCO.
The Act outlines specific consequences and penalties for non-compliance with the provisions of the TCO or the Act itself. While the Act does not explicitly detail penalties for breach, it does state that the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date (269S(1)). However, if the provisions of the TCO or the Act are breached, it may lead to legal actions where the court can impose penalties or sanctions as deemed appropriate. For instance, failing to comply with the conditions of the TCO could potentially lead to financial penalties or other legal consequences as determined by the relevant authorities.